Moore v. Sun Insurance Office

• Decision Date: 22 March 1907
• Docket Number: 14,913 - (132)
• Citation: 111 N.W. 260,100 Minn. 374
• Parties: ERNST E. MOORE and Others v. SUN INSURANCE OFFICE
• Court: Minnesota Supreme Court

111 N.W. 260

100 Minn. 374

ERNST E. MOORE and Others v. SUN INSURANCE OFFICE

Nos. 14,913 - (132)

Supreme Court of Minnesota

March 22, 1907

Action in the district court for Ramsey county to recover $1,500 upon a fire insurance policy. The case was tried before Brill, J., and a jury, which rendered a verdict in favor of Tremont National Bank, one of the plaintiffs, for $737.90, in favor of John S. Sepp, another of the plaintiffs, for $802.60, and in favor of the defendant against Ernst E Moore. From an order denying a motion for a judgment notwithstanding the verdict or for a new trial, defendant appealed. Affirmed.

SYLLABUS

Action on Fire Insurance Policy.

After a loss under a standard form of fire insurance policy, the insured may sue as for a total loss, and allege in addition thereto the actual amount of the damage. If the evidence fails to establish a total loss, there may in the same action be a recovery for the actual damages as proven.

Condition of Policy -- Mortgagee.

A condition with reference to the use and occupation of a building held not available against certain mortgagees.

Right to Demand Arbitration.

The right to demand arbitration of the amount of the loss is waived by a denial of liability on the policy.

M. H Boutelle and N. H. Chase, for appellant.

Charles J. Berryhill and Durment & Moore, for respondents.

OPINION

ELLIOTT, J.

This action was brought by Ernst E. Moore, the Tremont National Bank, and John S. Sepp against the Sun Insurance Office to recover the amount claimed to be due on the policy of fire insurance of the standard form. This policy, for the sum of $1,500, was issued in 1902 to Helen G. Hill, and covered her interests in certain property known as the "Stryker Seminary." The insurance value of the property was fixed at $10,000, and concurrent insurance to that amount was permitted and written. When the policy was issued the Tremont National Bank held a mortgage on the property and the usual mortgage clause, making the loss, if any, payable to the bank as its interest might appear, was attached. Through foreclosure proceedings, of which the insurance company had proper notice, the title of the property became vested in the mortgagee. Thereafter, about July 7, 1905, the Tremont National Bank sold the property to the plaintiff Moore, and as a part of the purchase price he gave back a mortgage for the sum of $4,700, which is still in force. On August 14, 1905, Moore executed two contemporaneous mortgages on the property to Sepp, one for $5,300 and one for $2,000, both payable six months from date. The aggregate of the bank mortgage and the two Sepp mortgages thus exceeded the stipulated insurable value of the property. On August 17, 1905, the bank assigned the policy upon which this action was brought to Moore, and at that time a rider was attached, which made the loss, if any, "payable first to the Tremont National Bank of Boston, Mass., and second to John S. Sepp, as their respective interests may appear." A fire occurred on September 6, 1905. Due proofs of loss were made, and, the policy not being paid, this action was brought. After issue was joined the insurance companies settled with Moore, and the fact was pleaded in a supplemental answer. The controversy was thereafter between the insurance company and the two mortgagees. The trial court held that the company was liable, and, there being no dispute as to the amount of the interest of the Tremont National Bank, directed a verdict in its favor for the full amount claimed by it. As to the plaintiff Sepp the jury was instructed that he "is entitled to recover in this case to the extent of his interest. He is entitled to recover something, and the question is how much. Now, how much he is entitled to recover depends upon the extent of his interest. The extent of his interest is covered in a measure by his interest in these mortgages which were executed by Moore to him." The jury returned a verdict in favor of Sepp for the full amount of his claim, and the defendant appealed from an order denying a motion for judgment notwithstanding the verdict or for a new trial.

The appellant makes numerous assignments of error, all of which are predicated upon the denial by the trial court of the following assertions: (a) In an action on a valued policy for a total loss, a recovery cannot be had as upon a cause of action on an open policy for a partial loss; (b) the evidence shows a breach of the condition and warranty with respect to the use and occupation of the premises which invalidates the policy; (c) the facts show a failure to comply with the condition relating to arbitration, and the action was therefore prematurely brought; (d) the verdict was against the preponderance of the evidence in respect to the amount of Sepp's interest; and (e) the court erred in submitting the question of Sepp's interest to the jury.

The policy in question provides that "the insurable value of said building is hereby stated to be $10,000." The statute (R.L. 1905, § 1642; See Laws 1895, p. 401, c. 175, § 25) provides that:

Every company insuring any building or other structure against loss or damage by fire, lightning or other hazard, by the issue of a policy or renewal of one theretofore issued, or otherwise shall cause such structure to be previously examined, a full description thereof to be made, and its insurable value to be fixed, all by the insurer or his agent, and the amount thereof to be stated in the policy. In the absence of any change increasing the risk without the consent of the insurer, of which the burden of proof shall be upon it, and in the absence of intentional fraud on the part of the insured, the whole amount mentioned in the policy or renewal...